Applications of Per Capita and Proportions

Use the Historical CPI-U data table from the in-class CPI activity to answer questions 1-4. 1. From class we learned that in 2010 the federal debt was $13.56 trillion and the population of the U.S. was 309 million. a. Use these values to compute the federal debt per capita in 2010. Round to the ...

Brexit referendum in the EU

Please assist me by providing a detail background about the UK referendum to stay in EU? Please assist me to understand why there is such issue at the first place? How did it all became a referendum for public to decide whether Britain should exit EU? What are the political/financial reason behi...

Continuous Income Stream

Starting at age 25, you deposit $2000 a year into an IRA account for retirement. Treat the yearly deposits into the account as a continuous income stream. If money in the account earns 6%, compounded continuously, how much will be in the account 40 years later, when you retire at age 65? How much of...

New Economics & Option Strategy

1. Use a diagram to explain the "new economics" proposition of monetary policy effectiveness. Describe the underlying assumptions of the new economics model. What is the policy ineffectiveness proposition? 2. Use the figure attached... a. to demonstrate the gains and losses to a short put a...

Balance Sheets, Double-Entry Bookkeeping and Currency Arbitrage Questions

1. Describe, and illustrate with balance sheets of both the Bank of Canada and the direct clearers with the Canadian Payments Association, the change in the monetary base in response to the following transactions: a. A Bank of Canada open market sale to the public of $100 million of Government o...

James Tobin Model for Money Demand

Formulate James Tobin's model of risk and portfolio choice, and with the use of a diagram, show how his model explains the inverse relationship between the demand for money and the rate of interest.

Virtual Banking, Interest Rate, Risk and Return for Portfolio

-) What is the price of a 91-day treasury bill when market yields are eight percent? -) Explain how caps, floors, and collars are used to control interest-rate risk. -) What is meant by the term virtual banking? Outline the advantages and disadvantages of virtual banking to the public. -) ...

Uses of Maturity Gap and Duration Gap

a. Explain how portfolio managers can use maturity gap and duration gap to measure their exposure to interest-rate risk. b. Explain how portfolio managers can use financial options and futures to hedge interest-rate risk. c. Describe how portfolio managers use financial swaps to control their ...

Randy's Tireland - Contribution Margin and Net Loss

Randy's tireland makes a product that sells for $61 per unit and has $54 per unit in variable costs. Annual fixed costs are $24,000. If Rambles sells 10 units less than breakeven, how much loss would the company recognize on its income statement?

weighted average contribution margin

Lambardi Company sells 3 types of bags. Bag A sells for $20 and has variable cost of $9.00 per unit. Bag B sells for $13 and has variable cost of $12.00 per unit. Bag C sells for $4 and has variable costs of $6.00 per unit. Lambardi sells in a mix of 2 units of A, 3 units of B and 5 units of C. ...

target cost

A new product is being designed by an engineering team at Golem Security. Several managers and employees from the cost accounting department and the marketing department are also on the team to evaluate the product and determine the cost using a target costing methodology. An analysis of similar pro...

Completing a Break Even Analysis

A company has $50 per unit in variable costs and $1,200,000 per year in fixed costs. Demand is estimated to be 110,000 units annually. What is the price if a markup of 40% on total cost is used to determine the price?

effect on profit

PowerDrive, Inc. produces a hard disk drive that sells for $175 per unit. The cost of producing 25,000 drives in the prior year was: Direct material $625,000 Direct labor 375,000 Variable overhead 125,000 Fixed overhead 1,500,000 Total cost $2,625,000 At the start of the current year, t...

full cost

The Falling Snow Company is considering production of a lighted world globe that the company would price at a markup of 0.30 percent above full cost. Management estimates that the variable cost of the globe will be $68 per unit and fixed costs per year will be $240,000. Assuming sales of 1,200 unit...

Profit of Tory Company

Tory Company sells a single product. Troy estimates demand and costs at various activity levels as follows: Units Sold Price Total Variable Costs Fixed Costs 120,000 $48 $3,000,000 $1,000,000 159,000 $45 $3,550,000 $1,000,000 160,000 $40 $4...

incremental savings

Howell Corporation produces an executive jet for which it currently manufactures a fuel valve; the cost of the valve is indicated below: Cost per Unit Variable costs Direct material $920 Di...

Joint Cost

Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,400 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $0.85 per pound. Allocate the joint costs using re...

Margin of safety

Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $90, unit variable cost is $30, and the fixed costs per month are $5,000. The margin of safety is:

break even

Winny's Office Furniture has a contribution margin ratio of 16%. If fixed costs are $187,800, how many dollars of revenue must the company generate in order to reach the break-even point?

Variable cost using the High- Low Method

Rooter's Cleaning Services provided data concerning the costs incurred to clean hotel rooms for which hotel customers pay $150 per night. Data for the past 7 months are as follows: January February March April May June July Number of rooms cl...

budget

Mama Italiano Sauce is in the process of preparing a production cost budget for May. The actual costs in April were: Mama Italian Sauce Production Cost Budget April 2008 Production - Jars of sauce 20,000 Ingredient cost (variable) $16,000 Labor cost (variable) ...

Incremental Costs

Consider the production cost information for Mama Italiano Sauce given below: Mama Italian Sauce Production Cost Budget April 2008 Production - Jars of sauce 20,000 Ingredient cost (variable) $16,000 Labor cost (variable) 9,000 Rent (fixed) 4,000 Depreciation ...

Incremental Profit or Loss

Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow: (1) Work full time at a local accounting firm making $2,900 per month. (2) Take a summer class which will cost $800 and work half time makin...

Capital Gain/Loss of Brighton Corp.

Brighton Corp. bought an oil rig exactly 6 years ago for $113,000,000. Brighton depreciates oil rigs straight line over 10 years assuming no salvage value. The rig was just sold to British Petroleum for $34,000,000. What Capital Gain/Loss will Brighton report on this transaction?

Stock Value Using CAPM and DDM

Frazier Manufacturing paid a dividend last year of $2, which is expected to grow at a constant rate of 5%. Frazier has a beta of 1.3. If the market is returning 11% and the risk-free rate is 4%, calculate the value of Frazier's stock.

Weighted Average Cost of Capital (WACC) of Firm's Financing

Assume the following facts about a firm's financing in the next year. Calculate the weighted cost of the capital of this project: Proportion of Capital Projected funded by debt = 45% Proportion of Capital Projects Funded by equity = 55% Return Received by Bondholders = 0.08 Return Re...

NPV for an Art Gallery Expansion

An Art Gallery is adding to its existing buildings at a cost of $2 million. The gallery expects to bring in additional cash flows of $520,000, $700,000, and $1,000,000 over the next three years. Given a required rate of return of 10 percent, what is the NPV of this project?

Internal Rate of Return for a Company's New Development Project

A Company is planning to invest in a new development. The cost of the project will be $23 million and is expected to generate cash flows of $14,000,000, $11,750,000, and $6,350,000 over the next three years. The company's cost of capital is 20 percent. What is the internal rate of return on this pro...

The Economics of your Starting Salary

Scenario: You have chosen biology as your college major because you would like to be a medical doctor. However, you find that the probability of being accepted into medical school is about 10 percent. If you are accepted into medical school, then your starting salary when you graduate will be $300,0...

Calculating the Dividend Gain

Lee purchased a stock one year ago for $25. The stock is now worth $30, and the total return to Lee for owning the stock was 0.37. What is the dollar amount of dividends that he received for owning the stock during the year?